Tax developers, not vehicles: Congestion pricing is the wrong way to deal with traffic and generate revenue for the subways

By Eric Uhlfelder

Mar 09, 2019 | 5:00 AM

Not the main problem. (Mary Altaffer / AP)

Imagine you live in a small town and local officials encouraged some of the country’s biggest companies to move in, which subsequently caused terrible traffic. In not having accounted for such impact, town leaders then decided to tax local residents every time they use their cars.

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In a nutshell, this is exactly what New York’s local and state leaders are proposing.

Our city and transit planners ushered in three seismic failures congestion pricing purports to solve: massive redevelopment of Manhattan over the past decade (160 million square feet, according to Dodge Data and Analytics), which did not come with sufficient infrastructure expansion or taxes on development to help pay for such improvements; an unregulated influx of for-hire vehicles, whose numbers now exceed 100,000, seven times more than yellow taxis; and a mismanaged subway system, which has failed to benefit from rising fares as workers and residents now opt for more reliable transport.

Congestion pricing has already brought surcharges to taxis, a beleaguered industry reeling in reaction to the unregulated explosion of app-hail vehicles, which also pay the same tax. Officials now seek to levy a similar tax on all drivers because the lobbies that represent them are weak if non-existent. This scheme is regressive in that it hits middle- and working-class drivers much harder than wealthy drivers while creating a cash cow that doesn’t ensure efficient use of proceeds to improve transit.

The governor and mayor would have you believe that, if drivers want to avoid the large fees, they can either choose to enter Manhattan below 60th St. during off-hours or opt for public transit.

But taxi drivers don’t have that choice. Neither do residents who need their cars for jobs and family. Service vehicles and truckers delivering goods don’t have that choice if clients aren’t open at night. And this tax will be passed on to consumers.

What makes more sense is to tax new development in congestion zones to help fund necessary transit improvements that these new buildings directly require. Make this tax progressive, with larger buildings paying higher rates.

Then, issue bonds against this new revenue stream to start essential capital improvements. And explore innovative ways to levy congestion taxes retroactively on all large buildings in these areas that have contributed to the problem and that profit from subway access.

These new taxes will redirect development to parts of the city that can better handle it. The city should also limit app-hail cars in Manhattan and force them to pay a taxi medallion-like fee to be in the clogged borough.

Expedite the mayor’s development plans for ferry services along the East River and all of the Hudson River to relieve subway congestion. This new system would take a fraction of the time and money to build compared to traditional transit systems. (Ferries are also be a more rational alternative to the mayor’s light rail plan for Queens and Brooklyn, which is adjacent to the East River.)

If a congestion tax is voted on, officials should explore an incremental approach that’s more rational and equitable than the present severe plan, which would drain $1 billion per year out of the economy. One option: setting up alternating access days to Manhattan based on the “odd and even” license plate number system. Drivers who opt to travel on their off day would pay a steep tax. This would be more equitable while immediately reducing congestion.

But developers — who profit hugely from their location in the city and access to subways — are the ultimate cause of congestion. Taxing them would more accurately recognize the true cost of development.